Featured on Innovation Management – Liz Parsons of Vertical Leap, talks about David Hilliard’s view on why business transformations fail.
Interviewed and Written by Liz Parsons
Ambitious and impractical business schemes can often lack the fundamental elements needed to make them a reality, leaving huge expense and casualties of the blame game in their wake. The business world is littered with the remnants of unrealised programs and unsuccessful plans for development, several of them so high profile as to have attracted national notoriety.
But why do so many grand plans undertaken by companies and organisations fail to come to fruition? David Hilliard, CEO of strategy execution specialists, Mentor, believes the biggest contributing factor to failure is the people tasked with carrying out these ventures. We’ve taken a closer look at his thoughts on why business transformations fail, as well as the consequences of program failure and how thorough planning can make all the difference.
The only thing more excruciating than having to admit defeat on a project you are responsible for, has to be having the world as a witness. Some of the most conspicuous organisations going have made monumental debacles of their business transformations, and on a public scale.
Recent examples include the NHS National Programme for IT, which was named as one of the ‘worst and most expensive contracting fiascos’ ever by the House of Commons Public Accounts Committee. Originally created to migrate all NHS records into a central digital hub, the program never got off the ground and was abandoned in 2011 after it had run up a bill of over £20 billion.
The BBC’s Digital Media Initiative was a similar story. Far from digitising its videotape as it was designed to, the BBC first collaborated with subcontractor Siemens on the project but eventually brought it in house after a missed deadlines and rising costs. Expenses reached £100 million and after the programme was cancelled in 2013, the PAC noted that the BBC had been ‘far too complacent about the high risks involved in taking it in-house’.
With blunders like these taking place in the public domain, it’s clear that having an audience is no barrier to having to admit that your business transformation has crashed and burned.
Behind every failed project…
As Mentor’s David Hilliard has seen time and time again, the reasons why an idea fails are usually less to do with overcomplication or using untested technology, and more to do with failings on the part of the program deliverers. Having the wrong people in charge of your business transformation is more likely to make it unsuccessful than any other factor.
There are several mistakes made by businesses embarking on plans for major development that repeatedly crop up, most of which are made early on during the initial set up phase.
The first is that of going ahead with an idealistic business transformation that isn’t fully formed or researched and is ultimately unattainable. The original idea may be a great one, but when unachievable timescales and unworkable objectives rear their ugly heads, the lack of substance behind an unviable plan becomes painfully obvious.
Assigning program lead roles to existing staff and only allowing them a portion of their time to work on it, rather than giving the program full-time dedicated management, is also a recipe for disaster. This inevitably leads to these part-time project managers missing or under-estimating problems that arise, while attempting to juggle the complexities of not only this, but all their other responsibilities. Once the problems become too big to escape notice, it is often too late to rectify them.
Many failed business transformations also suffer from an unclear or non-existent chain of command, resulting in confusion while the program is underway and a vacuum of accountability once it all goes wrong. This fear of accepting failure can pervade an entire team, as each individual seeks to cover up the program’s decline and defend any part they may have played in it, hoping that the blame will eventually settle on someone else’s shoulders.
Once it’s clear that the program is beyond repair, thanks to missed deadlines, undelivered objectives or skyrocketing costs, stakeholders step in. But with reputations on the line, even they can be loath to admit defeat and may try desperately investing even more money and time into the failed program.
The consequences of project failure
Failed business transformations can have disastrous effects on a company, in terms of its finances, its standing and for its staff.
Aside from the obvious immediate and lasting problems caused by wasting large amounts of money, the financial fallout of a failed program can mean potential investors steer clear for the foreseeable future. If, like the examples we mentioned above, the company or organisation is unlucky enough to fail in public view, the damage to its reputation can be serious and long-lasting, and in some case, irreparable.
And then there are the fall guys. In many cases, the initial idea would have been the brainchild of an untouchable CEO, which means that blame is apportioned to one or several senior managers. Whoever takes the hit, a firing attached to a failed business transformation can take years to come back from, if they come back at all.
What can we learn from program failure?
The cautionary tales offered by unsuccessful business endeavours should provide food for thought for any company looking to undertake a business transformation. Good managers should strive to avoid the pitfalls of the human factor when planning and strategising the initial stages of a program, for the best chance of a smooth-running and effective business venture. It also pays to listen to the professionals in program delivery rather than attempting a potentially overwhelming business transformation alone.